Lost in Europe's Gathering Gloom
By Lisa Bergson
"We want to be in semiconductor, but we just don't have the right products," said one of the would-be independent sales reps -- call him Jorge -- whom I interviewed in Germany last week. Scurrying between appointments in the persistent drizzle, I clutched an umbrella lest my hair turn frizzy. Like Jorge, everyone from job candidates to potential strategic partners yearned to be in something, anything, else. "I want to see where I'm going, but it's foggy right now," one job-seeker put it.
The folks I met had an uncertain quality I'm not used to seeing in Germans. We can vie with them for the arrogance award. But the smug sense of superiority I tend to associate with the Germans in my field was barely evident in my recent encounters. In our business, analytical equipment, a dismal economy and competition from Asia have folks looking for a product panacea.
KNOW THE TERRITORY?
"You have the first new technique in years," enthused Jorge. "We're looking for companies with new techniques -- most of our principals have mature products." He and his partner, Helga, gathered their team in a small conference room to meet me. My company, Tiger Optics, boasts a new technology that is a bridge to many markets, most immediately the semiconductor industry.
Yet, the three prospective reps I saw had little-to-no experience in our core markets. At first they tried to fudge it. "Who do you know at Air Liquide and Linde?" I probed, mentioning two of our key accounts. The pair stammered and looked slightly ashamed. Undaunted, Helga scurried to her computer and rattled off a list of names at Linde.
I was drawn to this pleasant-faced, middle-aged woman, with two carefully stenciled eyebrows that floated like dark sideways commas. It would be fun to work with her, I thought. Yet, she conceded that they don't know the chief semiconductor gas-analysis buyer at Linde, or any of the Air Liquide people, either -- two of our key accounts. I am determined to market Tiger's technology through established channels, where we can get to market as quickly as possible.
"Why do you want to go into semiconductor, anyway?" I asked. "It's very depressed and extremely cyclical."
Jorge resorted to platitudes: "If you want to harvest tomorrow, you have to prepare today."
That assumes a revival of the semiconductor industry in Europe. The more I travel to Asia, however, the more convinced I am that the market is shifting to China. "But they don't have the quality," asserted a young prospective rep, whose sizable company is mainly involved in low-tech products. "They are behind on technology." As with every meeting I had in Germany, he had thoughtfully placed an array of beverages and butter cookies on the conference table.
"Well, they have our new equipment if that tells you anything," I noted. "The Americans, the Taiwanese, and the Europeans are all active there. They want to get in on the Chinese market. It won't be long before they have the technology and the quality."
He looked glum. In general, Northern Europeans pride themselves on their quality, their expertise, not to mention the manners with which they conduct business. "We have all day," was an oft-repeated mantra. Despite their short work days and generous vacations, meetings were leisurely, with much more time allotted than certainly I require. (Heck, I can size up a prospective partner in an hour: journalist's training.) I still don't know how they get stuff done.
Plus, everybody wanted to feed me. "That's Germany," said Helga after I turned down her offer of lunch, explaining that another company already took me out for sushi. Over a bowl of fruit, she explained that her firm relied on small, high-value-added niches. Trouble is, even these specialized markets are drying up like so many puddles in the equatorial sun. Under the circumstances, semiconductor starts to look good.
THEN AND NOW.
Conversely, a semiconductor-equipment company -- and potential reseller -- was interested not just in its own applications, but also sought exclusive rights to markets it doesn't presently address. "We are familiar with those markets -- we used to be in them," the division head, call him Stefan, asserted.
"But you're not in them now," I retorted. "Listen, you can't pay me enough for this equipment to compensate for lost business opportunities. Not after all these years of development." When I speak with Germans, I tend to get Wagnerian, imagining myself poised for battle with a metal breastplate and horned helmet.
"I see we need to understand better Tiger's strategy," he said coolly. At least Stefan recognizes that for those reliant on the semiconductor industry outside Asia, it's likely to be slim pickings going forward. Faced with such challenges, what I find most troubling is the lack of initiative shown by most of these managers. They hardly market their lines and appear resigned.
WE'LL CALL YOU.
Jorge's company, for example, relies mostly on its Web site, doing little in the way of direct mail, road shows, or trade shows. Cold calls are verboten in Europe. When I pushed for quarterly activity reports and forecasts, he sighed. "We don't like it, but we'll do it."
Asked about growth plans, Helga replied: "If we can just stay even, we'll be happy." Abruptly, she left the room, and I heard the curious sound of bottles clanking. As I was leaving, she handed me a thin canvas bag loaded with a bottle of local wine, a glass, a bottle opener, and other goodies. En route to the airport and weighed down already, I passed her kind gift along to my taxi driver.
Europe has much to offer, but Tiger still hasn't got what it needs.
Lisa Bergson is President and CEO of both MEECO and Tiger Optics. Before joining MEECO in 1983, Lisa Bergson worked as a business journalist at BusinessWeek and freelanced for many business publications. You can visit her companies' Web sites at www.meeco.com and www.tigeroptics.com, or contact her at email@example.com